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Energy return on investment - which fuels win?

The days of easy to extract fossil fuels are
numbered. Companies are using more energy-intensive methods to get
to conventional fossil fuels, and turning to harder-to-extract
fuels such as shale gas. But do these sources give us a good return
on the energy we invest? A new article investigates how assessing
this return could help us make decisions about our energy
future.

The feature in Scientific American compiles a
range of sources to look at which energy sources provide the most
energy compared the the amount of energy it takes to extract them -
called their energy return on investment (EROI). We take a look at
the returns different fuels offer - and examine some other
considerations to take into account when choosing how to meet
energy demand.

Energy return on investment

Professor Charles Hall, an ecologist at the SUNY
College of Environmental Science and Forestry, developed the
concept of EROI to give a common measure for comparing very
different fuels.

Finding out fuels' EROI means working out how much
energy it takes to make the materials usable - like finding oil,
drilling the well, pumping it out and refining it - and how much
energy you get afterwards. It's a simple equation - you divide the
energy output by the energy input. A high EROI means you get a lot
of energy out for very little energy expended.

This infographic puts hydroelectricity, wind and coal
as the best performers, while natural gas, solar and nuclear
deliver a much lower return on this measure:

Source: Scientific American

The reason hydroelectric and wind power do so well on
this measure is mainly due to the relatively small amounts of
energy needed to build dams and turbines - at least compared to
building a nuclear power plant. Coal is relatively easy to extract
in energy terms and has an EROI comparable to wind power, according
to this study.

The processes involved in building and managing
nuclear power - such as mining, uranium enrichment and waste
storage - are all very energy intensive. This makes it a poor
electricity generation choice in terms of energy return on
investment. Solar panels are energy-intensive to manufacture, so
have a similarly low EROI - although the article's author, Mason
Inman, tells us it is going up.

It's worth noting, however, that the range of
estimates for nuclear's EROI is very large indeed, ranging from an
estimated 40 to 60 - from the World Nuclear Association - to less than one.
Inman tells us he used a paper that reviewed many studies, which puts
nuclear's EROI at five.

So does this mean the world should give up on
conventional oil and invest in hydroelectric power instead? Not
necessarily - there are some other considerations the EROI
calculations don't address.

Calculation complications

As is often the case when comparing energy sources,
deciding which is best depends what you include in the
calculations.

For example, with the higher-EROI sources - hydro,
wind, and coal - other considerations like generation intermittency
and regulatory environments become more important than the amount
of energy needed to get a return, Inman tells Carbon Brief. For
example, if grids can't be adjusted to deal with intermittent
supply from renewable sources like wind, that makes these sources
more expensive - and potentially reduces their EROI if a lot of
gas-fired power is needed for backup generation.

Equally, the calculations don't include the
environmental costs of the different energy sources - like those
related to greenhouse gas emissions. If the US brought in a carbon
tax, coal would become far more expensive to burn by requiring the
installation of expensive carbon capture technology, for
example, making it less attractive from an economic perspective.
Inman notes that EROI can "highlight how efforts to cut pollution
[...] can drastically affect a fuel's affordability".

What's more, there is more than one type of EROI
measurement. Inman tells us he reviewed a wide range of literature,
but settled on the measurements that seemed most consistent with
each other as the basis of his calculations. We've included Inman's
full list of references below.

One key difference between EROI calculations is what
is considered as an energy input. For example, some tar sands
production uses the tar sands themselves as sources of energy for
some of the process - classed as 'internal' inputs. Inman
says he only used 'external' energy inputs - those that have to be
taken from outside of the process itself, or "that society puts
in".

So the return we get from different energy sources
can be a useful measure when choosing which to build into our
energy mix, telling us how much energy to expect from them. As
Inman says in the article, taking EROI into account means
"investment can be guided to the sources that most effectively keep
the economy humming and that can also help build a sustainable
future".

EROI isn't the only factor that needs to be
considered when picking the best fuels, but it highlights the fact
that we're having to expend more and more energy to meet demand -
and spend more money on keeping emissions down. This could become
even more of a problem in the future.

Sources

Mason Inman kindly shared his list of sources with
us, along with some notes. Scientific American has also published a
blog in which Inman discusses how he
calculated the different EROIs and an interview with Charles Hall.

Tar sands: There are no peer-reviewed, published
estimates of the EROI for tar sands, as far as I could tell. Inman
drew on a paper by Adam
Brandt of Stanford University (Adam Brandt et al., "The
energy efficiency of oil sands extraction: Energy return ratios
from 1970 to 2010," under review byEnergy). The paper reports
various types of EROIs for tar sands, and Inman used the number for
the external energy ratio for refined fuels.

Corn ethanol: There have been heated arguments over
what the EROI is for corn ethanol, such as a 2006 exchange in
Science. But all seem to agree that its EROI is less than two-which
puts it at the bottom of the heap for liquid fuels. I drew on a
meta-analysis that averaged six different estimates, giving an EROI
of 1.4. Hammerschlag, "Ethanol's Energy Return on Investment: A
Survey of the Literature 1990-Present," Environmental Science &
Technology(2006) (link).

For sources of electricity, Inman says he used values
that are for electricity produced by a particular source, rather
than the EROI for the production of the raw fuel that can be used
to make electricity. So in the case of coal, for example, the EROI
for the coal itself would be roughly three times higher than the
EROI for electricity from coal (because the typical efficiency of a
coal-fired power plant is around 33 percent).

Coal: Most studies on the EROI of coal report the
value at the "minemouth," for all the energy content in the coal.
To make it comparable with other electricity sources, especially
renewables, Inman used the EROI for electricity from coal. One
particular focused on solar power, but compared it with
fossil fuels: Raugei et al.,"The energy return on energy investment (EROI) of
photovoltaics," Energy Policy (2012). The EROI figure
there was consistent with what you would get from a
back-of-the-envelope calculation, dividing the minemouth EROI for
coal by three, to account for the losses of energy in a power plant
(personal communication, Charles
Hall of S.U.N.Y. Environmental Science and
Forestry).

Solar (PV): There are a wide variety of estimates
of solar PV's EROI as well-in part because the technologies and
production techniques are improving fast, a major reason for the
large price reductions over the past decade. Inman used the most
recent peer-reviewed study he could find - Raugei et al., 2012,
cited above. Solar PV's EROI is almost certainly rising (Raugei et
al., 2012; personal communication, Michael Dale of Stanford University). The
latest data in Raugei's study was at least a couple of years old,
so the EROI today is most likely higher than 6, the number cited in
the article, Inman tells us.

Natural gas: Inman says it was difficult to find an
EROI estimate for natural gas because data for natural gas is
typically reported along with that of oil. For the EROI figure of
7, Inman used an alternative measure devised by Carey King of the
University of Texas at Austin that he calls the "energy intensity
ratio," and which is comparable with the EROI. King's value for the
energy intensity ratio of electricity from natural gas is also
consistent with what a back-of-the-envelope calculation would give,
using an EROI of oil and natural gas of 20 at the wellhead, and
adjusted to take into account the typical efficiency of a natural
gas power plant (around 40 percent to 45 percent). King, "Energy intensity ratios as net energy measures of United
States energy production and expenditures,"Environmental
Research Letters (2010).

Nuclear: As with hydroelectricity, the EROI
estimates for nuclear power span a very large range. Some claim
that the EROI is actually less than 1-which would mean that the
whole process is not a source of energy, but rather a sink-whereas
others (such as the World Nuclear Association, an industry group)
estimate that the EROI is much higher than perhaps any other source
of energy, around 40 to 60 when using centrifuge enrichment. Inman
drew on a paper that reviewed many studies, and estimated the EROI
to be 5. Lenzen, "Life cycle energy and greenhouse gas emissions of
nuclear energy: A review,"Energy Conversion and
Management (2008).